Answer:
1.
DR Cash.................................................$240,000
CR Common Stock................................................... $200,000
Paid in Excess of Par- Common Stock.....................$40,000
Working
Common Stock = $20 * 10,000 = $200,000
Paid in Excess of Par- Common Stock = 240,000 - 200,000 = $40,000
2.
DR Promotion Expenses................................$45,500
CR Common Stock.........................................................$5,000
Paid in Excess of Par- Common Stock ........................$40,500
Working
Common stock = 5,000 * 1 = $5,000
Paid in Excess of Par- Common Stock = 45,500 - 5,000 = $40,500
3
DR Promotion Expenses..........................$45,500
CR Common Stock....................................................$45,500
4
DR Cash ...................................................$170,500
CR Preferred Stock .....................................................$125,000
CR Paid in Excess of Par - Preferred Stock ..............$45,500
Working
Preferred Stock = 50 * 2,500 = $125,000
Paid in Excess of Par - Preferred Stock = 170,500 - 125,000 = $45,500
In capital rationing, alternative proposals that survive initial screening by cash payback and average rate of return methods are further analyzed using:________
Answer:
Net present value and internal rate of return
Explanation:
when making a decision between alternative projects, initial analysis is done with the cash payback and average rate of return.
Cash payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows
Average rate of return = Average net income / average book value.
this is followed by the Net present value analysis and Internal rate of return determination.
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
project with the highest positive project NPV should be chosen.
Also, a project with an IRR greater than the discount rate should be chosen. when choosing between alternative projects, the project with the highest IRR should be chosen if the IRR is greater than the discount rate.
If the current interest rate is 5% and your semi-annual coupon paying bond has a duration of 5.33 years, how much will the price of the bond change if the interest rate increases by 1 basis point?
Answer:
Percentage change in price = -5.33 * 0.00005
Explanation:
Percentage change in price = - modified duration * (Change in yield in BP/100)
Percentage change in price = -5.33 * ((0.01/2)/100)
Percentage change in price = -5.33 * (0.005/100)
Percentage change in price = -5.33 * 0.00005
Sonny's BBQ Company recently issued $85 par value preferred stock that pays an annual dividend of $9. Analysts estimate that the stock has a beta of 1.01. The current T-bill rate is 2.4%. The S&P 500's expected return is 12.1%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock?
Answer:
Intrinsic value=$73.77
Explanation:
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset.
According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
Price = D/Kp
D- Dividend payable
Kp- cost of preferred stock
So will need to work out the cost of equity using CAPM
The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c
This model is considered superior to DVM. Hence, we will use the CAPM
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 2.4%, Rm- 12.1% β- 1.01
E(r) = 2.4% + 1.23×(12.1- 2.4)% = 12.20 %
Cost of preferred stock= 12.20 %
Using the dividend valuation model
Intrinsic value = 9/0.1220=73.77
Intrinsic value=$73.77
Domingo Corporation uses the weighted...
Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,300 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent Complete
Materials costs $7,400 50%
Conversion costs $3,600 20%
A total of 8,700 units were started and 8,000 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $160,600
Conversion costs $122,300
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. How many units are in ending work in process inventory in the first processing department at the end of the month?
a. 700.
b. 1,700.
c. 6.400.
d. 2,700.
Answer:
3,000 units
Explanation:
Calculation for How many units are in ending work in process inventory
Using this formula
Ending work in process units =Beginning work in process units + Units started into production - Transferred to the second processing department units
Let plug in the formula
Ending work in process units= 2,300 units + 8,700 units - 8,000 units
Ending work in process units= 3,000 units
Therefore 3,000 units are in the ending work in process inventory in the first processing department at the end of the month.
Yellowstone Corporation has just announced the repurchase of $125,000 of its stock. The company has 39,000 shares outstanding and earnings per share of $3.29. The company stock is currently selling for $76.09 per share. What is the price–earnings ratio after the repurchase?
Answer:
The price–earnings ratio after the repurchase is 22.18
Explanation:
First calculate Numbers of new shares
New Shares = Old Shares - ( Repurchased Shares / Price per share )
New Shares = 39,000 - ( $125,000 / $76.09 )
New Shares = 39,000 - 1,642.79
New Shares = 37,357.21 shares
New compute the old earning
Old Earning = EPS x Numbers of old shares = $3.29 x 39,000 = $128,310
New compute revised Earning per share
Revised EPS = Earning / New shares = $128,310 / 37,357.21 shares = $3.43
Now we need to calculate the Price earning ratio
P/E Ratio = Price per share / Revised earning per share = $76.09 / $3.43 = 22.18 times
Hughey Co. as lessee records a capital lease of machinery on January 1, 2011. The seven annual lease payments of $350,000 are made at the end of each year. The present value of the lease payments at 10% is $1,704,000. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). Round to the nearest dollar.
a) Prepare an amortization table for 2 011 and 2012.
b) Prepare all of Hughey's journal entries for 2011.
Answer:
Both requirements are solved below
Explanation:
An amortization table can be made as follows
DATA
Lease term = 7years
annual lease payments = $350,0000
Present value of the leases payment = $1,704,000
Implicit interest rate = 10%
Requirement A Amortization table for 2011 and 2012
Date Annual payment Effective decreased Balance
interest liability $1,704,000
12/31/11 $350,000 $170,400 $179,600 $1524,400
12/31/12 $350,000 $152,440 $197,560 $1,326,840
Requirement B journal entries for 2011
January 1
Entry
DEBIT CREDIT
Leased machinery $1,704,000
Lease liability $1,704,000
December 31
Entry
DEBIT CREDIT
Interest expense $170,400
Lease liability $179,600
Cash $350,000
December 31
Entry
DEBIT CREDIT
Depreciation expense(w) $426,000
Accumulated depreciation $426,000
Working
Sum of the years = (7+6+5+4+3+2+1) = 28
Cost = $1,704,000
Residual value = $0
Estimated life = 7years
Depreciation expense = $1,704,000 x 7/28
Depreciation expense = $426,000
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be ______, and the gross profit must be ______. Review Later
Answer:
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be 40%, and the gross profit must be $17,250.
Explanation:
The income statement is missing, so I looked it up and the information given was:
Revenue 100,000 COGS 40,000 Gross Profit 60,000 Salaries Marketing Rent Earnings Before Tax 23,000Income Tax 25% Net Income ?Since COGS are$40,000 and total sales are $100,000, the COGS margin percentage = 40,000 / 100,000 = 40%
Since earnings before taxes are $23,000 and taxes are 25%, then net income = $23,000 x (1 - 25%) = $23,000 x 75% = $17,250
An assembly line with 17 tasks is to be balanced. The longest task is 2.4 minutes, and the total time for all tasks is 18 minutes. The line will operate for 450 minutes per day.Required:a. What are the minimum and maximum cycle times? b. What range of daily output is theoretically possible for the line? c. What is the minimum number of workstations needed if the maximum output rate is to be sought?d. What cycle time will provide an output rate of 125 units per day?
Answer
a)Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes
b)=187.5 units per day and 25 units per day
c) 8 workstation
d)2.6min/cycle
Explanation:
Given:
output rate = 125 units per day
Operating time= 450 minutes per day
What are the minimum and maximum cycle times?
Minimum Cycle time = duration of the longest task
Therefore,Minimum cycle time = 2.4 minutes
Maximum cycle time = addition of the task
Maximum Cycle Time = 18 minutes
Therefore, Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes
B)B)What range of daily output is theoretically possible for the line?
Range of daily output = Operating time / minimum Cycle time
At 2.4 minutes Cycletime
= 450/2.4
=187.5 units per day
At Cycle time 18 Minutes
= 450/18
Cycle time 18 minutes = 25 units per day
C)What is the minimum number of workstations needed if the maximum output rate is to be sought?
number of workstation=(D× summation of all task)/Operating time
number of workstation=(187.5*18)/450
= 7.5= 8 workstation
D)What cycle time will provide an output rate of 125 units per day?
cycle time= Operating time/output rate
=450/125
= 2.6min/cycle
In response to the financial crisis, the Fed and the U.S. Treasury took all of the following policy actions except _______.
a. lowering tax rates on commercial bank profits
b. The Troubled Asset Relief Program
Answer: lowering tax rates on commercial bank profits
Explanation:
The financial crisis which is also widely called the global meltdown was caused as a result of the financial indutry deregulation.
The goal of TARP was to strengthen the banks, and improve market stability. Lowering tax rates on commercial bank profits wasn't part of the action used by the government.
Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to:
Answer:
c. $ 14,238
Explanation:
Computation of costs in the flexible budget
Planned activity 716 units
Budgeted cost per unit $ 18 per frame
Total planned variable cost - 716 units * $ 18 $ 12,888
Fixed monthly cost $ 1,350
Total supplies cost in flexible budget for June $ 14,238
The other information regarding the actual costs and actual production are not required for determining the budgted cost for supplies.
Empirical evidence from 1960 to 2010 shows that convergence in economic growth is occurring in which of the following cases?
a. All low-income countries are catching up to all high-income countries.
b. Low-income industrial countries are catching up to high-income developing countries.
c. Low-income developing countries are catching up to high-income industrial countries.
d. Low-income industrial countries are catching up to high-income industrial countries.
Answer:
Correct Answer:
c. Low-income developing countries are catching up to high-income industrial countries.
Explanation:
The evidence which shows that low income developing countries are catching up to high-income industrial countries could be found in the series of developmental strides made by some countries like Rwanda, Kenya, Tanzania, Indonesia, Vietnam etc over the years. Most of their achievements is at par with most European countries in different sectors such as educational, and social sectors.
. A particular parcel of real estate (land) is sold for $20,000,000 and was originally purchased for $10,000,000. On a taxable sale, explain a circumstance (type of investor, intent, entity, etc.) that would pay the following U.S. federal income tax results on the $10,000,000 gain (exclude the 3.8% net investment income tax and any state taxes in the calculation):
Question Completion:
Choices: a. No tax liability on the sale b. $2,000,000 of tax c. $2,960,000 of tax d. $2,100,000 of tax
Answer:
b. $2,000,000 of tax for individuals
Explanation:
Long-term capital gains tax is a tax on profits from the sale of an asset which an investor has held for more than a year. The approved long-term capital gains tax rates are 0%, 15% or 20% depending on your taxable income bracket and whether you are filing as a single or jointly as married. But, an important point to note is that long-term capital gains tax rates are generally lower than short-term capital gains tax rates, thus encouraging investors to hold assets for a longer time. Short-term capital gains tax rates are the rates applicable to the normal individual income tax brackets.
Costs that are capitalized because they are expected to have future value are called product costs; costs that are expensed are called period costs. This classification is important because it affects the amount of costs expensed in the income statement and the amount of costs assigned to inventory on the balance sheet. Product costs are commonly made up of direct materials, direct labor, and overhead. Period costs include selling and administrative expenses.
A service company has which of the following costs
a. Direct Material
b. Overhead Costs
c. Product Costs
d. Expensed in the period incurred
Answer:
b. Overhead Costs
d. Expensed in the period incurred
Explanation:
-Direct material refers to the cost of the material used to manufacture a product.
-Overhead costs are the costs related to the operation of the business and they can't be assigned to a good or service.
-Product Costs are the costs to manufacture a product.
-Expensed in the period incurred are the period costs which are costs not related to the production of a good.
According to these definitions, a service company has the following costs: overhead costs and expensed in the period incurred because these are costs that are not related to the creation of a product.
On the other hand, the other options direct material and product costs are not right because these costs are directly related to products.
15. Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discounted at 10% was $81,100. Ten annual lease payments of $12,000 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $66,000, and its retail fair value was $81,100. What amount of interest revenue from the lease should Smith Co. report in its December 31, 2021, income statement
Answer: $3,455
Explanation:
The interest received by Smith can be calculated as;
Interest Value = Present value of lease payment * interest rate
Present Value of interest rate
Ten annual lease payments of $12,000 are due each year beginning July 1, 2021.
That means first payment has been made already. Present value is;
= 81,100 - 12,000
= $69,100
Only half a year has gone by so this will need to be reflected;
Interest Value = Present value of lease payment * interest rate
= 69,100 * 10% * 6/12
= $3,455
A firm has the following gross requirements for Item OF. Ordering costs are $60 per order and carrying costs are $0.50 per period.
Item F Period
LT: 1 1 2 3 4
Gross Requirements 60 40 80 60
Schedule Receipts
Project on Hand 100
Net Requirements
Planned Order Receipts
Planned Order Releases
If EOQ lot sizing is used the minimum order quantity would be:_______
a. 85
b. 100
c. 120
d. 150
Answer:
c. 120
Explanation:
The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The formula for Economic order quantity is represented by the formula:
EOQ = [tex]\sqrt{\frac{2*Demand*Ordering Cost}{Holding cost} }[/tex]
EOQ = [tex]\sqrt{\frac{2*240*60}{0.5} }[/tex]
EOQ = 120
If the range of feasibility indicates that the original amount of a resource, which was 20, can increase by 5, then the amount of the resource can increase to 25.
a. True
b. False
Answer: True
Explanation:
The range of feasibility is used to measure values that are on the right-hand-side(objective function) that won't alter dual prices.
When the range of feasibility indicates that the original amount of a resource, which was 20, can increase by 5, then the amount of the resource can increase to (20 + 5) = 25
Therefore, the option is true
The production sector would NOT include Group of answer choices a Florida orange grove a California wine grower a meat packing plant
Answer: Meat packing plant
Explanation:
The options to the question are:
A. California wine grower
B. meat packing plant
C. horticultural nursery
D. Florida orange grove
E. none of the above
Of all the options given in the question, the correct answer is meat packing plant. It should be noted that the meat packaging plant will not be part of the production sector due to the fact that no productive activities are taking place, it only involves in services.
The declaration, record, and payment dates in connection with a cash dividend of $77,000 on a corporation's common stock are October 1, November 7, and December 15.
Required:
Journalize the entries required on each date.
Answer:
Oct 1
Dr Cash Dividend $77,000
Cr Dividend Payable $77,000
Nov 7
No Entry required on the record date
Dec 15
Dr Dividend Payable $77,000
Cr Cash
Explanation:
Preparation of the Journal entries for each date
Based on the information given we were told that the cash dividend of the amount of $77,000 was a corporation's common stock are October 1, November 7, and December 15 which means that the transaction will be recorded as:
Oct 1
Dr Cash Dividend $77,000
Cr Dividend Payable $77,000
Nov 7
No Entry required on the record date
Dec 15
Dr Dividend Payable $77,000
Cr Cash
Company X's current assets increased by $40 million from 2007 to 2008, while the company's current liabilities increased by $25 million over the same period. The cash impact of the change in working capital was:
a. A decrease of $15 million
b. An increase of $15 million
c. An increase of $40 million
d. An increase of $25 million
Answer:
b. An increase of $15 million
Explanation:
The computation of the cash impact of the change in working capital is shown below:
As we know that
Working capital = Current assets - current liabilities
So, the change in working capital is
= Increase in current assets - increased in current liabilities
= $40 million - $25 million
= $15 million
Hence, the b option is correct
Disturbed Corp. needs to raise $57 million to fund a new project. The company will sell shares at a price of $23.70 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. The direct flotation costs associated with the issue are $725,000 and the indirect costs are $445,000. How many shares need to be sold?
Answer: 2653438 shares
Explanation:
From the information given in the question, the following can be deduced:
The share price will be:
= $23.70 × (1 - 7.5%)
= $23.70 × (1 - 0.075)
= $23.70 × 0.925
= $21.9225
The money that will be raised will be:
= 57,000,000 + 725,000 + 445,000
= $58,170,000
The number of shares that are needed to be sold will be:
= $58,170,000/$21.9225
= 2653438 shares
Assuming that the firm is maximizing profits, the marginal cost of the last unit produced equals:________
Price Quantity Total cost
10 10 80
9 20 100
8 30 130
7 40 170
6 50 230
5 60 300
4 70 380
a. $4
b. $40
c. $5
d. $50
e. $6
Answer: b. $40
Explanation:
A firm maximises its profits where Marginal Revenue equals marginal cost.
Marginal revenue is the additional revenue gained by selling one more unit of production.
At 40 units, the marginal revenue is equal to;
= Total revenue at 40 units - total revenue at 30 units
= ( 7 * 40) - ( 8 * 30)
= 280 - 240
= $40
At 40 units the marginal cost is;
= total cost at 40 units - total cost at 30 units
= 170 - 130
= $40
MR=MC which is $40.
When Production decreases what is a very likely possibility? a hire new workers b expand production c purchase new equipment d downsizing
The correct answer is D. Downsizing
Explanation:
In businesses, the term "downsizing" is used to describe a reduction in the number of workers or the total labor force. This often means non-essential workers are fired or even complete departments are eliminated. Moreover, this is likely to occur if the business expenses are higher than its profits or if the production decreases because in both situations fewer workers are needed to eliminate unnecessary expenses. In this context, if production decreases it is likely downsizing occurs.
On February 3, 1969, New York lawyer and businessman _______________ was appointed the Beatles' business manager, as John was impressed by what the man had done financially for the Rolling Stones.
Answer:
Allen B. Klein
Explanation:
Allen B. Klein was an American businessman that became a powerful person in the music industry because he managed several artists and became well known for helping them increase their income and he worked with Sam Cooked, the Rolling Stones and The Beatles who hired in him in 1969 as their manager. According to this, the answer is that on February 3, 1969, New York lawyer and businessman Allen B. Klein was appointed the Beatles' business manager, as John was impressed by what the man had done financially for the Rolling Stones.
Food Shoppe Galore had the following information: Total market value of a company’s stock: $650 million Total market value of the company’s debt: $150 million What is the weighted average of the company’s debt?
Answer:
18.75%
Explanation:
Food Shoppe galore has a total market value stock of $650 million
The total market value of the company's debt is $150 million
The first step is to calculate the total market value of the company's capital
= $150,000,000 + $650,000,000
= $800,000,000
Therefore, the weighted average of the company's debt can be calculated as follows
= $150,000,000/$800,000,000
= 0.1875×100
= 18.75%
Hence the weighted average of the company's debt is 18.75%
If an economist wishes to determine whether there is evidence that average family incomes in a community exceeds $25,000:_______
a. either a one-tailed or two-tailed test could be used with equivalent results.
b. a one-tailed test should be utilized.
c. a two-tailed test should be utilized.
d. None of the above.
Answer: one tailed test should be utilized
Explanation:
From the question, we are informed that an economist wishes to determine whether there is evidence that average family incomes in a community exceeds $25,000.
A one tailed test should be utilized because the region of rejection will just have to be based on one side.
A firm has a debt-to-equity of 0.69 and a market-to-book ratio of 3.0. What is the ratio of the book value of debt to the market value of equity?
Answer:
0.23
Explanation:
Debt to Equity Ratio = Total debt/ Total common equity
Market to book Ratio = Market price per share / Book value per share
Book debt to Market equity Ratio = Debt to Equity Ratio / Market to book Ratio
Book debt to Market equity Ratio = 0.69 / 3
Book debt to Market equity Ratio = 0.23
Therefore, the ratio is 0.23
The practice of changing prices for products in real time in response to supply and demand conditions is referred to as
Answer:
Dynamic pricing
Explanation:
In simple words, Dynamic pricing, often alluded to as rising rates, vibrant pricing as well as period-based pricing, relates to the pricing technique under which companies set variable prices for goods or commodities on the basis of existing consumer demands. A main benefit of competitive pricing seems to be the opportunity to increase the income with each consumer.
The basic unit in which data are stored in an accounting system is called an __________. These storage units should be so constructed as to readily receive money measurements of the __________ or ___________ in the items for which they are established.
Answer:
it would be 3 units for the first part then second answer would be 5 then the last one would be 13
Explanation:
that's why it would be asking for how many units for each storage units
Identify five HRM criteria or components that can be used to measure organizational effectiveness or ineffectiveness. "Grievance rate" is an example.
Answer:
They include;
1. Customer Satisfaction
2. Absenteeism
3. Legal Compliance
4. Performance
5. Training
Explanation:
The Human Resource Management criteria that are used to measure the effectiveness or ineffectiveness of an organization, are a list that gives an idea of how an organization is performing, and this list can serve as a basis of comparison with other organizations. These options include;
1. Satisfaction: If the employees are treated fairly and so, feel satisfied with the organization, then they can be said to be effective.
2. Absenteeism: When workers are always absent from work it does not present the organization as an effective one.
3. Legal Compliance: The organization must be able to comply to government rules and regulations guiding the business to be rated as effective.
4. Performance: High or low-performance which is reflected in the turnover rates would be an indication of how effective or ineffective an organization is.
5. Training: The organization should be able to provide regular standard training for its workers to be rated as effective.
Budgeted variable overhead for the year is $150,000. Expected activity is 30,000 standard direct labor hours. The actual hours worked were 15,000 and the standard hours allowed for actual production were 18,000. The variable overhead efficiency variance is:
Answer:
-$15,000 favorable variance
Explanation:
variable overhead efficiency variance = standard overhead rate x (actual hours - standard hours)
standard variable overhead rate = $150,000 / 30,000 = $5actual hours 15,000standard hours 18,000variable overhead efficiency variance = $5 x (15,000 - 18,000) = $5 x (-3,000) = -$15,000 favorable variance
